2009 – A look back in angst
by Malcolm MacLean
January is named after the Roman god Janus who had two faces – one looking towards the New Year and one looking back to the old one so, taking our cue from him, we examine some of the main stories of 2009 and ask leading brokers for their predictions for 2010.
2009 saw a major price correction in the brokerage market…
After several boom years of overheating, the brokerage market came crashing down to earth, with sales in the first quarter being particularly slow. Sellers and brokers responded in many cases by slashing prices, the biggest cut perhaps being the 78.6m Princess Mariana, offered by Fraser Yachts at a price reduced by €27 million to €98 million. Other significant price drops saw Merle Wood & Associates report a series of cuts to the 50m JeMaSa from €49.9 million in March to a current figure of €29.95 million, while the 62m Fortunato dropped by $10 million to $59 million. Over the course of the year we recorded over 250 reductions and of course those were only the ones reported to us.
…but some very large yachts did sell…
An otherwise quiet year did see the sale of some noteworthy yachts as Burgess reported the sale of Perini Navi’s 88m Maltese Falcon, one of the biggest sailing yachts in the world. Incidentally, she’s now available for charter through Burgess.
On the motor yacht side, Merle Wood sold Feadship’s 86m Ecstasea, with a rumoured asking price in the region of €150 million and Amels' 70.5m motor yacht Boadicea also sold, again by Burgess. Overall, though, it was a series of smaller, older yachts making the sales news as shrewd buyers took advantage of a slack market to buy cheaply and put the yacht straight into refit to bring her back up to scratch.
…while others under construction need new owners soon
Another striking feature of this year’s news is the number of yachts currently in build that are looking for owners. The 68.15m Sycara V, for example is due to be delivered by Nobiskrug in early 2010 and is currently offered by Edmiston and Merle Wood & Associates at €75 million, while on a smaller scale the 44m Free Spirit is in build at Bloemsma Van Breemen for delivery in 2010. Offered for sale by Yachting Partners International she was originally on the market complete at €28.5 million and is now for sale in ‘as is’ condition at €11 million.
….and more yachts come on the market…
Barely a day now passes without news of another superyacht coming on to an already crowded market and brokers have reported tales of owners’ disappointment when told what their pride an joy might fetch in a fiercely competitive environment. We’ve recorded over 300 superyachts entering the sales listings since the start of 2009 and can only hope that their owners take a realistic, pragmatic view when setting asking prices in the hope that this gets the market moving again.
…but the year sees no discernable pattern in sales overall
The first quarter of 2009 saw very poor sales as the world absorbed the full impact of the global crisis and sales continue to bump along the bottom until a quite extraordinary September when 24 superyachts were reported sold, a record month for the year. However, October saw a decline to 14 sales and November was even worse with only nine boats sold. We were braced for another fall in December but were very pleasantly surprised as, at the time of writing, 24 yachts have been reported sold and there are still a handful of days left in the year. Top sellers were Feadship, with 12 superyachts sold, followed by Benetti with nine and Alloy Yachts with five.
And what does 2010 hold in store for us?
We asked several senior brokers to dust off their crystal balls and give us their views on what 2010 holds for the market. We’re delighted to report that there is a mood of cautious optimism, with Toby Walker of Camper & Nicholsons International saying, “I see a slow but constant increase in the volume of sales and charter as we enter Spring. Enquiries to buy and charter yachts are coming in more often already, but the ultimate decision making and commitment will not happen until summer is around the corner. Expect a rush of yachts filling their charter calendars towards April and May and hopefully, prior to this, reports on various sales.”
Jonathan Beckett at Burgess is rather less sanguine, foreseeing more of the same conditions that prevailed in 2009, although he does say that some sellers are falling in line with the new market and there will always be deals to be done. He concludes by saying, “2010 is going to be a very challenging year. A year for working very, very hard – again.”
Across the Atlantic, Kevin Merrigan at Northrop and Johnson notes that he has several brokerage yachts currently being surveyed, the crew division has more vacancies than qualified applicants, and charter continues to pick up. Overall, he says, “I think 2010 will be a fine year in the yachting industry.”
Gary Wright at YCO tells us, “If you follow the coverage and comment on the luxury sector as a whole, even the most pessimistic souls have reasonably big hopes for 2010. Yes, we’re positive about the future, but that is more a result of hard work and the effort we have put in and will continue to put in to restructuring and reorganising YCO, than through any reliance on the state of the world’s economies.”
Chris Cecil-Wright at Edmiston shares the mood of optimism. Although he anticipates a slow start to the year, he expects the return of confidence in world financial markets will continue to translate into sales in the run up to summer, particularly for large, high quality second hand yachts. However, he does say, “I fear for sellers of lesser known brands and indeed for owners of lesser known yards. But I’m confident that if the well established facilities revert to offering attractive deals to owners who want to create a unique yacht, then new build buyers will return in 2010.”